http://articles.economictimes.indiatimes.com/2015-07-16/news/64495249_1_rana-kapoor-yes-bank-headroom (16th July)
ET Now: The Cabinet has finally given the nod for clubbing foreign investments under the composite investment cap, which spells good news for your business. What are your thoughts?
Rana Kapoor: It was eagerly awaited. It is indeed a very good news for our business, particularly for foreign ownership largely represented through the FII route. It has been fairly close to 49% in the past. Now, this is naturally going to allow headroom all the way up to 74%. That means another 27-28% headroom for FIIs to participate in the ownership of Yes Bank.
ET Now: For FII to participate, somebody has to sell. But your stock has done so well that I doubt if there will be any sellers. Your take?
Rana Kapoor: Market participants will decide the future course of action. There is enough liquidity in the stock. At some point in future, having taken enabling approvals for our $1-billion dollar fundraising, we will have the option to have an ADR-cum-QIP issue. So, there will be more stock when that happens.
It may happen in 6-9 months. It creates more liquidity in the stock and also gives us an opportunity to get back into the MSCI. As you know, we had to exit the MSCI a few months ago because of the limitation on the FII ownership.ET Now: MSCI entry means that suddenly you will be part of global benchmark funds. Do you get the sense that clients have been waiting for this composite limit to go up?
Rana Kapoor: Most definitely. We went on non-deal road shows in the US last month — in San Francisco, LA, Boston, New York — and in London. After that, I came to know with utter certainty that investors had been waiting for these limits to go up.
To that extent, it is a great reform for the country, and particularly for the banking sector. Naturally, Yes Bank is going to be a significant beneficiary of this.
ET Now: You have probably already spoken to the market about your potential ADR and QIP issue. How do things stack up on that front?
Rana Kapoor: We have got all enabling approvals from shareholders and the board of directors. But this headroom availability will yield the best results only when the time is most opportune.
So, to raise this $1 billion, we would naturally like to go to the markets when the stock price is more attractive.
I expect this to happen well before March 2016. That means we still have the next eight-and-a-half months to consider all aspects associated with the issue.
ET Now: At Rs 830, the stock is not far away from an all-time high. You think it is not attractive enough?
Rana Kapoor: It is difficult for me to comment on this. Market forces will decide what happens. All I can say is that there are a lot of encouraging reports from leading market research institutions. We would like to go by some of these reports.
Among these reports, there are only a couple that have a ‘sell’ on our bank. Another couple have a ‘hold’. Over 90% of the reports have a ‘buy’.
This may be the best time to load up yes bank.
Disc: views may be biased as I am invested.